Zinc prices and weak dollar cause concern at Tara Mines

The weakening price of zinc during the second quarter of this year after a stable performance in the first three months, in addition to a soft US dollar, has hit revenues at Tara Mines in Navan, one of Meath"s largest employers. The zinc price also was significantly influenced by continued rises in global stocks of the metal, the interim report for the first six months of 2008 from Tara Mines" owner, Boliden, shows. The Meath branch secretary of SIPTU, John Regan, however, took a positive approach to the future of the company, while recognising these negative factors. The union has concluded a two-year agreement with management at Tara following intensive negotiations earlier in the year. The result is that a threat of industrial action by SIPTU members on the use of contract workers has been lifted for the life of the agreement. A second issue, which had been of concern to SIPTU - the risk of unilateral return by management to the old miners" bonus - also has been resolved under the agreement. Mr Regan was positive regarding the agreement that 23 extra workers are to be employed at Tara Mines this year. Six of these already have begun work. The contract workers at the centre of the threatened action this year are now going ahead with 'capital development' in the South West Expansion (SWEX) section of the lead and zinc orebody, located in the general Bohermeen direction. The term 'capital development' at the Navan mine means that while miners are engaged at a section of the orebody and the company has ascertained that there is further ore ahead of this, work is carried to out to ensure that this area can be efficiently mined. This entails extraction of waste rock to make the ore-rich rock accessible. Tara Mines has some 7,000 metres of orebody over and above the area that its full-time staff underground can undertake capital development work on. So use of the contractors for capital development is regarded as crucial. Currently, the end of the mine life is reckoned to be 2018 but Mr Regan is hopeful that this can be further extended. Zinc price fluctuations can have a stronger impact at Tara Mines than at other Boliden group operations as the Navan operation relies heavily on its zinc production while others have higher lead or precious metal reserves and prices for these have risen. Zinc production for the first six months of 2008 fell by seven per cent, while the mine"s lead production was down by 11 per cent. According to the interim report, zinc production at Tara fell due to an imbalance between the mine"s development (the extraction of waste rock in order to access the orebody) and production. Production is expected to fall slightly over the next six to nine months. The report also referred to some disruption in conjunction with the intensive negotiations which, however, led to the successful conclusion of the two-year agreement as a factor in its performance. Tara Mines saw a 500 per cent rise in pre-tax profits to €175 million in 2006. While both unions and management have welcomed the agreement, the company has stressed that rising energy and steel costs, in addition to the zinc price fluctuations and the dollar"s position, are worries for the coming year. Tara"s electricity bill is set to rise by some €5 million. It uses steel in its rod mill procedure to crush the ore extracted from underground and the rising cost of this metal also will impact on the Navan firm, Boliden says.